On-chain data shows the 7-day average of the Bitcoin Hashrate has just set a new record, despite network difficulty being at an all-time high.
When the value of this metric goes up, it means new miners are joining the network and/or old ones are expanding their farms. Such a trend implies the chain is appearing an attractive venture to these validators.
On the other hand, the indicator registering a decline suggests some of the miners have decided to disconnect, potentially because they are no longer finding BTC mining profitable.
As is visible in the above graph, the 7-day average Bitcoin Hashrate has observed a sharp increase recently, which suggests the miners have added more computing power to the network. The indicator has now hit a value of 942.6 EH/s, which is a new record.
Naturally, whenever the price goes up, so does their income, which can incentivize them to upgrade their facilities. So it’s interesting that the uptrend in the metric has continued even with the price decline. That said, this is still just a 7-day average, so it remains to be seen how the trend will develop in the near future. It’s possible that a decline will be reflected with some delay.
The Difficulty automatically fluctuates about every two weeks. These adjustments change the metric in such a way so as to neutralize the change in the Hashrate. The feature exists to constrain miner income, making it so that these validators always receive the block reward at a consistent pace.
This means that no matter how much computing power Bitcoin miners add, they still earn the same amount. If new miners are joining, it means the competition just got fiercer for the same reward pool and if upgrades are happening, then profit margins just got lower (both would only be when the price remains the same, of course).
Given this, spikes in the Difficulty can often price out the miners already just getting by. The latest adjustment, which went through on Friday, caused the indicator to hit a new all-time high. But so far, it seems miners haven’t pulled back on their expansions yet.
Bitcoin has so far shown no signs of recovery as its price is still trading around $104,200.
